More incentives for the realty sector and serious policy execution will help in plotting upward growth,

The Mumbai-Pune Expressway turned out to be a tremendous growth driver for Pune’s realty market as it made the city far more accessible than before.

                                                              
While infrastructure is a definite growth driver for housing, several other factors need to be brought together to propel the demand for housing in any growing city and Pune is no different. The city has seen massive transformation over the last few years and the boundaries are only expanding further. A co-coordinated effort from different bodies is the need of the hour, maintain experts. 

Mohammed Aslam, Joint City Head - Pune, Jones Lang LaSalle India says: “The key growth drivers for residential property in cities will continue to be rational pricing, construction quality, availability of parking space, proximity to workplace or at least good connectivity by road and public transport and social amenities in the area. A majority of middle class buyers instinctively weigh the value of any residential property option against these factors.” 

Recovering economy and job stability is building confidence among the middle class buyer. The trend of nuclear families has been a key driver for residential real estate. The buyer today wants a practical home, the one that he can afford within his budget. Trust more of affordable housing to make sense. Aslam adds, “Many of the latest slew of projects feature smaller-sized units and more realistic pricing. It is likely that the government will see sense in making the housing market more attractive than it is now. Civic and social infrastructure are also going to play key roles in determining the attraction of existing residential locations and the viability of emerging ones.” 

The growth of IT and auto industries along with development of educational infrastructure has worked well in driving chunk of housing demand to Pune. Shashank Paranjape, Managing Director, Paranjape Schemes Constructions Ltd says: “Pune has a great ambience for education, which is a definite demand driver for actual users. Many students from across Maharashtra and even other states come to Pune for academic reasons. In Hinjewadi, huge job creation is awaited. IT majors like Wipro and Infosys are planning bigger campuses. The ancillary industries like the auto industry in Talegaon and Chakan are also driving a lot of demand. The floriculture industry is taking off well in Pune and adding to the demand.” 

Making finance affordable will play a crucial role in getting the volumes in place. Poonam Mahtani, National Director - Residential Services & Knowledge Systems, India, Colliers International says: “A key factor that plays an important role for the buyer is location. This clearly means that accessibility, safe and secure environment, developed infrastructure greenery, definitely influences the property demand. Developers need to be able to offer options that are affordable. The younger generation is looking to acquire property that are 2 BHK or smaller 3 BHK homes in terms of square footage. Steadying and lowering home loan rates by the financial industry will provide a boost to buyers who suddenly find cost of finance up by almost 20-30% over the last few years.” 

The availability of land parcels equips Pune to have large scale growth of township developments and gated communities, which have started to attract end users. Also, the walk-to-work concept has found many takers leading to newer commercial centres that have fuelled the housing demand. The new demand is for quality lifestyle and hassle free living. As a result, developers are working towards providing a more complete product offering to today’s customer.
 
Paranjape shares, “In one of our projects, we have an exclusive boating facility, while in another project, we have an equestrian centre. However, we are disappointed with government's action on public transport in Pune. The funds are not invested properly. There needs to be more proactive planning and execution.”
 
The government will have to work on building transparency into the system and streamlining policies. Rationalising taxes would make a lot of difference and so would an impetus on developing sufficient infrastructure in the city, which is growing in all directions. Rohit Gera, Joint MD, Gera Developments says: “The developer has to learn not to raise prices indiscriminately. The market in Pune is very stable and developers have a better understanding of the affordability of the buyer. But the government needs to stop treating this sector as a cash cow. The municipal authorities have recently recorded 575 crores as building permission collections, which have crossed octroi collections. The consumer is paying it so let us put this money back into developing infrastructure and civic amenities. If people see amenities being provided, they won't mind paying a price for them.” 

Source: The Times of India (Pune Edition) dated April 16th, 2011